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To Arms! Shippers Engage in “Arms Race” to Secure Global Shipping Capabilities

The last 18 months has seen a great deal of chaos in shipping and logistics. COVID-19, Brexit, manufacturing plant fires, capacity shortages, unprecedented e-commerce growth and more all contributed to extended delivery delays, increased returns, and a growing need for flexibility to meet consumer demands and ensure customer satisfaction.

Companies around the globe are rethinking every facet of their business model, from their sales model to their approach to inventory to how they handle returns. Among their top priorities, is trying to put transformative shipping strategies in place to execute expanded omnichannel approaches that include store-based shipping and expanded delivery options for traditional e-commerce purchases.

With major carriers like UPS and FedEx routinely announcing increased shipping surcharges and daily package capacity caps for peak season, while also dropping smaller freight clients altogether, shippers are rightfully seeking more regional carriers to incorporate into their carrier networks to pick up the slack. As LaserShip Chief Commercial Officer Josh Dinneen told the New York Times:

“Vienna, Va.-based LaserShip has expanded into several markets this year, and began delivering in Tennessee last month. The company now serves 21 states and the District of Columbia, and plans to push west of the Mississippi, said Chief Commercial Officer Josh Dinneen.

He said that holiday-season capacity is already locked up and LaserShip won’t add new clients until January.

‘We are adding north of 400% more customers this year than we did last year,’ Mr. Dinneen said. ‘These retailers are looking for alternatives to FedEx and UPS, and faster speed to their customers.’”

This is not a unique situation. Many regional carriers are capitalizing on the overflow of larger carriers and expanding geographic areas rapidly to accommodate demand while ensuring quick profitability, but onboarding new carriers is not the only tactic shippers are employing to improve service levels and keep up with demand. They’re also looking to increase options with proven carriers or carriers that look likely to prove out given strong investment.

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Utilizing Technology to Secure Global Shipping Capabilities

Of course, it’s not just carriers and services that shippers are ramping up; it’s also their use of technology to optimize their processes and uncover new opportunities. Technologies like Manhattan Associates’ Warehouse Management Systems and Order Management System continue to help shippers improve operations and fulfillment, especially when coupled with Logistyx’s cloud-based solution with state-of-the-art business intelligence and a carrier library of more than 550 carriers.

Manhattan unites information across the enterprise, converging order management with back-end supply chain execution. Logistyx offers Manhattan customers the ability to better manage their parcel shipping activities with support for a blended carrier strategy and the capacity to deploy an extensive selection of carriers, providing an expanded global footprint for customers to achieve the best value for every destination, delivery time and product.

These types of technology integrations optimize the entire order fulfillment process from end-to-end, saving valuable time and resources, cutting costs and helping ensure customer satisfaction during times of turmoil and in the face of unexpected challenges.

“Shippers face unprecedented challenges in parcel shipping, finding themselves in a shipping arms race to ensure they can navigate current and future circumstances to maintain the survival of their business,” said Adam Kline, Senior Director, Product Management at Manhattan Associates. “As shippers seek solutions to the current challenges while working to protect their businesses against potential future issues, the importance of growing transportation networks for greater choice becomes paramount. The combination of Manhattan’s and Logistyx’s solutions creates seamless flexibility, stability and security.”

Increase your Global Shipping Capabilities

Whether onboarding new carriers and carrier services, implementing new technologies, or both, shippers increasingly seek to employ a variety of strategies and tactics to ensure shipping coverage on a global scale.

Contact Logistyx today to see how we can help you navigate current and future obstacles in shipping and supply chain.

3 Tips for Getting International Shipping Right

Statista projects e-commerce revenues will increase to $4.88 trillion in 2021, which means if you’re a small to medium-size business, the time may be right to expand your product footprint across borders. But for many companies new to international shipping, there are multiple factors to consider, and ensuring a seamless customer delivery experience while maintaining profitability can be challenging.

Here are three strategies for streamlining cross-border e-commerce fulfillment while actually increasing profits per parcel.

1. Know how your product is regulated internationally.

Here’s a fun fact: it’s illegal to import calendars for commercial purposes into Vietnam. That’s right, folks, we said “calendars.” This means online retailers based in the U.S. may not send quantities of more than 100 calendars to customers in Vietnam. Break the law and prepare to do time (pun intended!).

And this is just one example of hundreds of country-specific regulations complicating international shipping. Talk about overwhelming!  But to simplify the complexity, UPS has an online tool that enables shippers to access a list of regulations. Input the origin and destination countries, and UPS returns information about shipping requirements.

Also, understand the duties and taxes. For example, when a U.S. retailer ships a pair of sneakers from Los Angeles to a customer, store, or warehouse in Chicago, there is a single shipping rate. But if this retailer sends the same pair of shoes to a customer, store, or warehouse in Amsterdam, the shipment is subjected to a whole new set of duties and taxes. The total cost of shipping an order internationally is referred to as the “landed cost,” and it is critical to understand this cost on the front end of the shipping process. Specifically, you want to know:

  • Is the product taxable? At what quantity?  At what value?
  • What customs regulations apply?
  • What is the country’s minimum threshold value for duties?

Keep in mind, duties and tariffs continuously change, and therefore this will be an ongoing exercise.

2. Decrease shipping costs with a cloud Transportation Management System (TMS) for parcel shipping.

Shipping parcels individually across borders, especially if they have a low price point, isn’t cost-effective.  Smart shippers are instead using break bulk services, wherein multiple orders are consolidated into one big shipment to cross the border in order to reduce shipping charges and paperwork. Once on the other side, the consolidated shipment is broken down into separate shipments for individual delivery.

A cloud TMS for parcel shipping ensures your labeling and documentation can support this, and Logistyx has seen customers achieve savings of more than 25% on their transportation costs by switching to a break bulk service rather than sending shipments individually. For large shippers sending multiple items, the economics of break bulk are clear. Not only is there a cost saving on the actual shipping charge, due to lower cost/weight rates on higher weight shipments, but there is a corresponding reduction in the quantity and cost of paperwork. If 50 individual shipments are consolidated into one break bulk shipment, there is only one set of paperwork to clear customs, meaning less chance of delays at the border. With carriers charging for each invoice declared at the border, the savings opportunities are clear, and having only one carrier invoice to be checked, also means less work for the finance department.

3. Use a cloud TMS for parcel shipping to rate shop.

Rating and rate shopping isn’t straightforward across the border. In Europe, for example, carriers use myriad rate calculation methods. Unlike the United States, there isn’t a uniform postal code system across Europe, which means rate-zone definitions differ by country, carrier, and service. Some rate zones are even a combination of country postal codes, regions, cities, etc. Furthermore, there are no European-wide tariff structures. Rating is done on a per-carrier basis according to zones, weight, volume, and distance, but also accounting for factors such as pack quantity and load meters. These variables, in conjunction with different currencies, further complicate rating and rate shopping. A cloud TMS for parcel shipping enables you to rate shop across your entire transportation network to identify the optimal carrier service for each shipment based on all of these variables.

Manage Cross-Border Shipping with a Cloud TMS for Parcel Shipping

In summary, shippers moving parcels across borders should consider using a cloud TMS for parcel shipping to ensure they can simplify the complexity of regulations, label and documentation requirements, rating, and rate shopping.

To learn more about how Logistyx TME can provide the necessary flexibility to successfully execute cross-border parcel shipping, contact an expert today

4 Considerations for Parcel Shipping in Europe

Europe is comprised of more than 40 countries, and 27 are members of the European Union (EU) post-Brexit. Although the geographic footprint of the EU is less than half that of the United States, what the EU lacks in square footage it more than makes up for in diversity.  Consider: the EU’s population is 50% larger than that of the United States and speaks 23 different languages.  And though the EU has somewhat standardized the economics, trade, and politics of its member countries, when it comes to parcel shipping, the landscape is anything but standard.  Parcel shippers are still faced with different regulations, infrastructure, rating methods, and carrier networks from one country to the next, and these differences create a significant amount of logistics complexity.

Here are four key elements to consider when shipping parcels in Europe.

1. Fragmented Parcel Shipping Carrier Market

Despite many mergers, the European carrier market is still populated by a number of small country- and region-specific carriers. And even when a large carrier is the result of multiple acquisitions, it’s commonplace for the domestic country network to continue to operate as it did prior to the acquisition. As a result, a shipper may contract with a “single carrier,” but navigate the complexity of multiple carrier entities to actually execute shipments – complying with multiple label, documentation, and tracking number formats and integrating with multiple systems for electronic exchange.

2. Regulations

ebook logistyx quadrant Choosing a TMS for Parcel ShippingAs a result of regulations in each individual country, shippers in Europe are usually required to produce additional documentation and reporting.  While shippers can transport goods (in free circulation) with minimal documentation (a Delivery Note or Packing List), shipments leaving the EU must be reported to customs electronically.  Unlike the United States, where shippers use a single Automated Export System, also known as AES, many EU member states use unique e-customs systems and reporting. Furthermore, shipments must have paperwork to travel, which can not only differ by country of export and country of import, but also by the countries through which the goods pass while en route to the final destination. Thus, if a shipper is leveraging a multi-carrier parcel management system to execute shipments, the system must have strong cross-border label and documentation capabilities.

3. Carrier Rating Differences between European Countries

There are myriad rate calculation methods European carriers can use. Unlike the United States, there isn’t a uniform postal code system across Europe, and therefore rate-zone definitions differ by country, carrier, and service. These rate zones may even be a combination of country postal codes, regions, cities, etc.  Furthermore, although approximately 75% of European freight is transported by road, there are no European-wide tariff structures. Therefore, rating is done on a per-carrier basis, typically based on zones, weight, volume, and distance, but also accounting for factors such as load meters and pack quantity. These variables, in conjunction with different currencies, further complicate rating and rate shopping.

4. Internationalization

Shippers must ensure their supply chain technology stack accounts for Internationalization (known as I18N), defined by the World Wide Web Consortium (W3C) as:

“Internationalization is the design and development of a product, application, or document content that enables easy localization for target audiences that vary in culture, region, or language.”

If a shipper is leveraging technology to execute parcel shipments, the user interface, documentation output, and external integrations need to be localized:

  • Languages
  • Number, date, and time formats
  • Currencies
  • Units of measure

Complicating matters further: the technology must be able to share and present information among different parties in their preferred format and language.

Manage Cross-Border Shipping with a Cloud Multi-Carrier Parcel Management System

In summary, shippers moving parcels across borders in Europe should consider using a cloud multi-carrier parcel management system to ensure they can simplify the complexity of carrier connectivity, label and documentation requirements, regulations, and rating.

To learn more about how Logistyx TME can provide the necessary flexibility to successfully execute cross-border parcel shipping, contact an expert today.

Why Parcel Shipping Data is Critical to your 2020 International Trade Strategy

The rules of international trade are rewritten all the time, and this has never been truer than it is today. To have an impactful international trade strategy in 2020 for parcel shipping, you’ll need to navigate the following:

Brexit

Brexit Logistyx White Paper DownloadBrexit will give rise to several changes to cross-border shipping that shippers will need to properly address to maintain their flow of goods and provide the service their customers seek.  For example, as the United Kingdom exits the European Union, the countries within will receive new country codes for shipping. While this may not seem like a big issue, shippers using shipping software that doesn’t include the new country codes may inadvertently find their parcels have been misrouted, causing delays, lost parcels, and spoilage of time-sensitive goods.

New country codes also trigger new codes for customs and carrier services, as well as new payment terms. Shippers within the EU using software solutions that continue to assume shipping to the U.K. is not an export will rely on outdated payment terms, leading to unexpected and unwelcomed charges.

Universal Postal Union

Navigating the changes to the Universal Postal Union (UPU) could also prove challenging.   Under the new deal, the UPU has agreed to let the U.S. set its own postal rates for imported parcels weighing less than 4.4 pounds. The deal also permits other countries to adjust their rates for inbound parcels from the U.S. annually starting in July 2020. For international shippers, this may mean higher prices for postal services.

U.S. – China Trade War

Another headline-grabbing event that recently rocked global commerce and distribution was the U.S.-China trade war. In 2019, import tariffs imposed by both the U.S. and China increased prices for e-commerce businesses and significantly impeded trade.  Small businesses sustained the brunt of the hit, and many organizations eyed Asian countries like Vietnam for fulfillment and manufacturing. In addition, online consumers in both the U.S. and China took “shop local” to a whole new level and increasingly upped their consumption of domestic products to avoid the hefty price tags on foreign imports.

Though the U.S. and China no longer appear to be fanning the trade war flames, shippers would be wise to keep a close eye on the situation while also exploring workarounds such as fulfilling from an alternate location, front-loading inventory, halting online product sales in the affected categories, and accounting for tariffs in pricing strategies.

Cost-Effective, On-Time International Shipping Requires Data

Manufacturers, retailers, and 3PLs shipping internationally need to review their transportation network with an eye toward flexibility.  When the ground underneath shifts (as it has of late), flexibility will be key to minimizing fulfillment disruptions.

And the key to achieving this flexibility?  Leveraging data.

In a recent survey by American Shipper, 50% of respondents admitted to receiving supply chain data from 15 or more data sources. Yikes!  And what’s perhaps more mind-blowing: more than a quarter stated this data hails from 50 or more different internal departments, service providers, and customers.  With so many data sources involved, how can the supply chain reporting process be anything less than chaotic?  How can the reports themselves be timely?  Insightful?  Actionable?

These staggering figures underscore a shipper’s need for a single solution to capture and connect all of the relevant data (not to be confused with all of the data) and then apply advanced data analytics to empower supply chain stakeholders to make fast, smart decisions that protect profit margins and enable consistent customer service.

Right System = Right Data = Right International Shipping Strategy

According to the American Shipper report, 53% of companies aren’t using Business Intelligence to collect and analyze their supply chain data. This poor adoption rate implies companies are still performing manual data analyses (translation: excel spreadsheets). And there’s no way companies using excel spread sheets have quick reaction times when their shipping landscape changes.  What they do have: delayed reactions to international shipping events and hence an over-abundance of risk in the form of shipping cost increases and delivery delays.

Advanced multi-carrier shipping systems are the key to reducing these risks.  They seamlessly integrate with business-critical enterprise applications and enable shippers to create a single shipping ecosystem, where data is accessible and accurate – a “sole source of truth,” if you will.  They feature data analytics and Business Intelligence to improve visibility into a shipper’s end-to-end transportation landscape and make it easy for shippers to identify trends and spot potential hiccups early, empowering them to make more informed decisions in a fluctuating international trade environment.  For example, in the case of the new UPU deal, leveraging data to perform a rate simulation across multiple U.S. carriers may reveal a more cost-effective shipping option.  Or in the case of Brexit, data analytics may identify opportunities for cross-border consolidation services shippers hadn’t considered before when shipping from/to the EU/U.K.

Future-Proof Cross-Border Shipping

While it may be hard to predict the next new tariff or trade war, businesses that are making use of their data will be ready to pivot when necessary.  Want to learn more about how you can leverage data to optimize international shipping?   Contact us today.

Logistics Viewpoints: Brexit’s Impact on Cross-Border Shipping

With or without an agreement, by the end of October, Brexit will have a major impact on cross-border shipping. To ensure a smooth transition and provide a seamless customer experience in line with expectations, businesses need to plan ahead by better understanding the precise nature and extent of the impending changes.

In a recent article for Logistics Viewpoints, Logistyx Technologies President and Chief Sales Officer Ken Fleming shares some of the inevitable adjustments, challenges and potential implications that Brexit will have on cross-border shipping. Ken also provides a checklist of factors that shippers need to proactively address in order to successfully navigate these effects.

Read Ken’s full article on Logistics Viewpoints: “Brexit’s Profound Impact on Cross-Border Shipping